Is Enough, Enough When It Comes To Bandwidth AT&T?

Time to get back to telecom issues and leave content and services alone for a few articles.

Ah, the glory days when we proclaimed at AT&T that 56 Kbit/s was all the bandwidth a business would ever need.  A few years later we updated that cap to a T1 or 1.544 Mbit/s.  Lately, The New AT&T proclaims that 35 Mbit/s is enough bandwidth for your TV, phone, and Internet access.  Is it?

Comcast does not think so.  Earlier this week, Brian Roberts, CEO of Comcast, demonstrated Internet access speeds of 150 Mbit/s at The Cable Show in Las Vegas.  The demonstration utilized the DOCSIS 3.0 standard to bond together the equivalent of 4 analog TV channels to obtain the desired bandwidth for the demonstration.  They plan on reclaiming bandwidth on the plant to offer 100 Mbit/s Internet access to homes by moving to an all digital plant, utilizing switched digital video, reclaiming bandwidth from legacy applications, and implementing MPEG-4 compression according to Tony Werner, Comcast's CTO.  Comcast is not resting on its laurels in the triple-play arms race.

Additionally, Comcast will have to incorporate node splits to ensure enough bandwidth to each home.  Splitting a node costs between $3.35 to $26 per home passed depending on they way that they actually split a node.  About 65% of those splits are of the "logical" type that cost $3.35.  A small cost compared with some of the telcos upgrade plans.

Let's compare these figures to the cost of AT&T's Project Lightspeed.  Also this week, AT&T announced that the capital expenditure of Project Lightspeed would increase from $4.6B to $6.5B and the number of homes passed to 18 million; down a million homes.  That announcement increased price per home passed to $361 which is now about half the cost per home passed of Verizon's FiOS project that is delivering 50 Mbit/s Internet access alone.  To reduce capital expenditures, AT&T relies on a fiber to the curb approach and existing copper cable for the last thousand feet which limits bandwidth to the home.

In addition to the cost, AT&T depends on a completely switched digital video network to squeeze the most out of the limited bandwidth over their aging copper plant.  The Microsoft software that powers their IP-TV network has proven to be less than reliable to date.  Add this up:  a totally new switched digital video network, the limitations of a copper infrastructure, and a multi-billion dollar build-out for a network that is barely sufficient to meet today's triple-play needs. 

Contrast this risky strategy with Comcast's low cost, high bandwidth network and you would think that the market would be going crazy for Comcast stock.  The opposite is true.  AT&T's stock keeps rising while Comcast's is holding steady after a setback in January.  The market is fixated on short-term numbers instead of the long-term picture.

In the triple-play arms race, Comcast is better suited to capture a greater market share with faster Internet access, a greater selection of HDTV programming, more responsive VOD, cheaper voice services, and an integrated suite of packages ala Zimbra.  Despite of what Om Malik says, Comcast is delivering the innovation to make it a triple-play market leader.

Technorati tags: AT&T (T), Comcast (CMCSA), Verizon (VZ), DOCSIS, FTTH

Lawsuits Gone Wild

So you think that concept patents and intellectual property law suits have not gone far enough?  On Thursday, I read in Forbes and heard on a Wall Street Journal podcast that Adobe Systems, Microsoft, Apple, and Real Networks have received cease and desist letters by Media Right Technologies (MRT) for "actively avoiding their X1 SeCure Recording Control."  MRT believes that because these companies do not use their DRM product that they are in violation of the Digital Millennium Copyright Act (DMCA). 

Talk about stretching application of the law.  Although the DMCA is overreaching in its objective, I am sure that Congress or the music industry (i.e. RIAA) did not intend for it to be convoluted in this fashion.  Who who is next?  EMI for selling non-DRM music through the iTunes Music Store.

Apparently MRT has developed a new business development technique that I am unaware.  If you cannot get a company to purchase your technology, threaten to sue them.  I see this move as a last ditch effort by a struggling company to coerce the big guys into keeping them afloat.  Hopefully the federal judge that ends up with this case, if they even file one, will not waste taxpayer dollars and throw it out.  Maybe MRT should consider hiring a good marketing and business development professional.

CNET News.com article

Technorati tags: Adobe Systems, Apple, Microsoft, Real Networks, DMCA, DRM

Comcast Acknowledges Upstream Powerboost

In the battle between cablecos and telcos, Comcast seems to be advancing the arms race nicely.  For months I have noticed that most downloads have been zippier at boosts up to 8 Mbit/s, but lately I have seen jumps over 10 Mbit/s.  This note on Broadband Reports prompted me to test my speed again.

As noted in the graphic above, I receive Ethernet speeds for short periods of time for downloads and almost a T1 in the upstream direction.  With DOCSIS 3.0 on the way, how long will it be before we see 100 Mbit/s?  No wonder why cable has captured over 70% of the VoIP business and is a serious threat to the telcos.  A common inbox for e-mail, voicemail, and IM may win me over from my VoIP provider that has not introduced anything new since E911.  Although it may be a duopoloy in most communities, the cable companies are serious about being your triple-play provider.

Technorati tags: Comcast, Internet

Tired of Crummy YouTube Videos

Everyday someone forwards me a link to another pixilated and grainy video on YouTube.  Most of the content are clips from previously copyrighted material, but the most annoying feature is the quality of the Flash-based video displayed.  In this day in age of high-definition video, why must we accept postage stamped size, poor quality video?  Because Adobe's Flash video leads the market in Internet-based video over Microsoft, Apple, Real, and DivX. 

This market lead has led Adobe to believe that they can launch yet another media player to compete against all of the other leading players and new ones like Joost and Democracy.  The Adobe Media Player is yet another video RSS aggregator that will include DRM and advertising.  So how will Adobe differentiate it from all of those other players?

Their only differentiator is the huge amount of web sites already using Flash video.  With the Adobe Media Player, web sites using Flash video can advertise through the player providing other outlet to their sites.  Adobe will line up all of the usual content providers to seed the player/aggregator with content.  But the question remains; do we really need yet another media player?

I have all of the above mentioned players on my machine and I use all of them because not one of them can satisfy all of my needs.  iTunes manages my podcasts and some of my music.  RealPlayer is my primary music library manager.  Democracy Player is my video podcast aggregator.  The only time I use Windows Media Player is when I download WMP-formatted content; otherwise, most web content is played from the web site with the embedded QuickTime player.  I would really like a single player that can do all of those functions so I would not have to chew up all of my disk space and CPU cycles running all of those separate players.

So that brings me back to the Adobe Media player.  How can Adobe differentiate their player from the rest of the fray?  From the announcement last week, I see no features or capabilities that would cause me to download and install yet another media player, and I believe that most users out there will feel the same.  The Adobe loyalists that use CS3 including Flash to design web sites will be the ones to use it.

Adobe has promised high-definition Flash video in its media player, but why bother when there is DivX.  DivX is the clear winner in high quality video over even MPEG-4.  I try to view and download content in DivX format whenever possible.  DivX produced high-definition Internet video before all of the others started jumping on the bandwagon.  This little San Diego company has a great underground following with some mainstream content that they publish through their Stage6 web site.  Visit Stage6 and you will see large, high-definition videos that are worthy of display on your computer or your $7000 plasma TV.  I often use their CODEC's with the RealPlayer to play and manage video.  I create home videos for playing on my computer, web site, or DVD with the DivX codec in Roxio's Easy Media Creator.

The problem with DivX is that it is not as ubiquitous on the web or in DVD as other media formats although many DVD players, TV, recorders, and cameras now support the DivX format.  DivX is challenged not by technology, but by a sound marketing strategy.  They have made great inroads in the consumer electronics market, but they failed to make significant penetrations in consumer content, web video, mobility, and IP-TV/Internet TV.

What markets are left for DivX?  They missed the boat to be the format for high-definition DVD.  Microsoft is leading in IP-TV deployments, and Adobe's Flash dominates the Internet.  That leaves them relegated to yet another video format to fight out a niche content creation market for those people that want exceptional quality video in a small package.  There is a long-shot that they could be utilized as a next generation mobile content format should they seek partnership with their neighbor Qualcomm.  As displays on mobile devices grow and have greater resolution, customers are not going to be content with the graininess from the 3GPP format currently in use.  DivX certainly has a shot to position themselves as a next generation mobile content format. 

Although a mobile strategy has the potential to propel them beyond the $100 million revenue chasm, I do not see the talent within the company to achieve that goal.  DivX will continue on their respectable revenue growth trajectory from software sales and licensing revenue and remain under the $100 million mark for the next few years.  Consumers will have to settle with poor quality Flash video with islands of DivX clarity and portability.

Disclosure: This article is linked to the DivX site where they offered to send a serial number for a copy of DivX Pro although I already have these capabilities through Roxio Easy Media Creator.

Technorati tags: DivX, Adobe, Apple, Microsoft, YouTube

The Transformation of the Written Word

This is an excellent video on how the printed word continues to change how humans interact.

Technorati tags: YouTube, web 2.0